The Tangled Web of Implementing the Digital Economy Act

Saskia Walzel explains the position of Wi-Fi providers, businesses and public bodies providing internet access under the new draft Initial Obligations Code. The consultation on the proposals closes on the 26th July.

Ofcom published a revised draft Initial Obligations Code on 26 June for a one month consultation under section 403 of the Communications Act 2003, and would like to hear from anybody who is likely to be affected by the implementation of its proposals. Businesses, public bodies and consumers need to establish how this draft code applies to them. The deadline for responding to the consultation is the 26thJuly.

What is proposed?

Ofcom proposes that the initial obligations will apply to fixed line ISPs with 400,000 or more subscribers. These “qualifying ISPs” are BT, TalkTalk, Virgin, BSkyB, O2 and Everything Everywhere. The initial obligation will be to pass on notices to subscribers if a copyright owner submits a “copyright infringement report” for a relevant IP address. Qualifying ISPs need to maintain “copyright infringement lists” for those subscribers who are notified three times or more in 12 months, and these lists need to be made available to copyright owners.

In principle a subscriber is anybody receiving internet access under an agreement, be they a domestic household, business or public body. In the draft code Ofcom is proposing that mobile broadband providers are generally exempt from the initial obligations, as they will only apply to “fixed internet”. Ofcom is also proposing that Wi-Fi hotspots should be exempt, but only commercial public Wi-Fi services such as BT Openzone or The Cloud. Anybody else, according to Ofcom, who receives internet access from a fixed ISP and passes that on as Wi-Fi to others within the premises, would be treated as a subscriber.

How does the draft code deal with businesses and public bodies providing internet access?

Ofcom acknowledges that there will be many situations where a subscriber to one of the six big ISPs essentially acts as a “downstream ISP”. Ofcom therefore sought to provide in the new draft Initial Obligations Code that the six big “qualifying ISPs” do not have to pass on notifications if they receive a “copyright infringement report” for a downstream ISP. However, the draft Initial Obligations Code does not clarify who is a downstream ISP.

In the consultation document Ofcom explains that in principle any undertaking receiving internet access for their own use (for example by staff) and providing access to others, should be treated as a subscriber. Ofcom explains that those receiving internet access “essentially and verifiably” to pass it on to others, should be treated as a downstream ISP by the six big qualifying ISPs, meaning that they should ignore any “copyright infringement report” submitted for such internet connections. Ofcom tried to address concerns raised about the last draft Initial Obligations Code it consulted on; namely that, unless otherwise stated, qualifying ISPs are legally obliged to pass on notifications to their subscribers, which is anybody who received internet access under an agreement. However, the new draft Initial Obligations Code does not define who may be a “downstream ISP”, instead Ofcom suggests that businesses and public bodies contact the six big qualifying ISPs and negotiate their status with them. That means businesses and public bodies which provide internet access to others, such as hotels, pubs, libraries and universities have to persuade their qualifying ISP to accept them as “upstream ISP” for the purpose of the Digital Economy Act 2010.

How does the draft code deal with consumers who pass on internet access to others?

Domestic households typically share internet connections, where one member of the household enters into a contract with the ISP, and then provides internet access to other members of the household under an agreement (which may be verbal or more formal). Domestic internet access is now typically provided via Wi-Fi routers, to enable multiple individuals and devices to use the same Internet connection. The six big qualifying ISPs cover 93.5 percent of the retail broadband market in the UK. Ofcom is proposing that only Wi-Fi hotspots, such as BT Openzone, and mobile broadband providers, would be exempt. Therefore under current proposals a consumer, who provides internet access to others in the household or to the public, will be treated as a subscriber. If you receive internet access and provide that to your housemates with the agreement that they pay a share of the monthly bill, you will be treated as a subscriber. If you are a landlord, who provides internet access to tenants, you will also be treated as a subscriber. Unless that is, you manage to persuade your qualifying ISP that you are a “downstream ISP”.

Key points:

Mobile broadband providers and Wi-Fi hotspots are supposed to be exempt

Those receiving fixed internet access at their premises, which they then make available to others via Wi-Fi, will be subscribers

Undertakings which “essentially and verifiably” receive internet access to pass it on to others, should be treated as “downstream ISP” by the big six “qualifying ISPs”

Undertakings which receive internet access for their own use (for example, by their staff) and pass on internet access to others, are subscribers

What does it mean to be a subscriber?

Under the Digital Economy Act 2010, if you are treated as a subscriber by your ISP, it means that you will be notified if a copyright owner lodges a “copyright infringement report” with the ISP for your IP address. This “copyright infringement report” is an allegation of copyright infringement, and it will relate to the IP address of your internet connection. The ISP will keep track of the number of notifications you receive, and Ofcom is proposing that those who receive three or more notifications in 12 months are placed on a “copyright infringement list”. Under the Initial Obligations Code, copyright owners can take disclosure orders, known as Norwich Pharmacal orders, out for “copyright infringement lists” to force the ISP to hand over subscribers’ personal data such as name and address. The Government then wants copyright owners to take subscribers on those lists to court for civil copyright infringement. Under the Technical Obligations Code, which can be implemented 12 months after the Initial Obligations Code has come into force, any subscriber on a “copyright infringement list” would be a “relevant subscriber” for what is termed “technical measures”. These may include the slowing of an internet connection, or “suspension”, by an ISP.

Subscribers can appeal notifications, but the Government wants to impose a £20 appeals fee (a cost order imposing such a fee will be discussed by Parliament in September), and under the Digital Economy Act 2010 subscribers are expected to show that they took “reasonable steps” to prevent others from infringing on their Internet connection. Ofcom does not define “reasonable steps” in the draft Initial Obligations Code it is currently consulting on. Neither does the draft Initial Obligations Code clarify the situation for open Wi-Fi providers. “Subscribers” such as Wi-Fi providers, hotels, pubs, libraries and universities would thus not only be incurring the cost of appealing notifications, but also of taking reasonable steps to prevent others from infringing, regardless of whether there are low or high levels of copyright infringement on their networks.

Why is Ofcom proposing exemptions for some ISPs?

In principle the initial obligations of the Digital Economy Act 2010 apply to all “internet service providers”, though Ofcom may specify under which conditions ISPs will be subject to the initial obligations. Ofcom is proposing to exempt mobile broadband providers and Wi-Fi hotspots because it is assumed that they have low levels of copyright infringement on their networks, and therefore the cost of imposing obligations under the Initial Obligations Code on them is judged to be disproportionate.

Saskia is policy manager at Consumer Focus responsible for copyright policy. She tweets as @SaskiaWalzel

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